FirstChoice Wholesale Investments part 2 - Colonial First State

COLONIAL FIRST STATE - FIRSTCHOICE WHOLESALE INVESTMENT FUNDS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE REPORTING PERIOD ENDED 30 JUNE 2013
5. FAIR VALUE HIERARCHY OF FINANCIAL ASSETS AND LIABILITIES
The financial assets and liabilities held for trading of the Funds are tabled below. These are further classified using a fair
value hierarchy that reflects the subjectivity of the inputs used in making the measurements of fair value of these assets
and liabilities.
The level in which instruments are classified in the hierarchy is based on the lowest level input that is significant to the fair
value measurement in its entirety. Assessment of the significance of an input requires judgement after considering factors
specific to the instrument.
The fair value of financial instruments traded in active markets (such as shares in listed companies and publicly traded
derivatives) is based on quoted market prices at the end of the reporting period. The quoted market price used for
financial assets held by the Funds is the last sale price. These instruments are included in Level 1. Investments in
unlisted managed investment schemes which have daily liquidity are also classified as Level 1.
Investments in unlisted managed investment schemes which have daily liquidity are also classified as Level 1.
The fair value of financial instruments that trade in markets that are not considered to be active but are valued based on
quoted market prices or alternative pricing sources supported by observable inputs (such as over-the-counter derivatives)
are classified within Level 2.
Investments classified within Level 3 have significant unobservable inputs, as they are infrequently traded. Level 3
instruments include shares in unlisted companies, certain unlisted unit trusts and certain corporate bonds. As
observable inputs are not available for these instruments, valuation techniques such as discounted cash flows are used
to derive fair value.
The various methods adopted in determining the fair value of the Funds' financial instruments are further explained
in the 'Summary of Significant Accounting Policies" note to the financial statements.
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